Industry Issues

Following close on the
heels of a new bottled water tax in Chicago, the state of Washington is
considering a ban on petroleum-based water bottles. The proposed law would
go into effect Jan. 1, 2010, and would ban the sale of petroleum-based
water bottles “by any retail store, wholesale club or vending machine
provider.” It also would prohibit state agencies from buying such
products.

According to the bill, the proposed law would include
bottles “made from a petroleum-based plastic not intended by the
manufacturer to be a reusable container that is one liter in size or
smaller and is marketed to contain nonflavored, uncarbonated drinking
water.” The bill specifies that it does not include bottles made from
corn or “other biological materials.” Proposed fines for the
sale of such products are $250 per day.

The International Bottled Water Association issued a
statement in response to the bill, saying, “Many people choose
[bottled water] because it does not contain calories, caffeine, sugar,
artificial flavors or colors, alcohol or other ingredients they want to
avoid or moderate ... any actions that prevent consumers from drinking
water, whether from the bottle or from the tap, are not in the
public’s best interest.” It added, “It would be
unfortunate that citizens in Washington would not be able to enjoy the
benefits of bottled water because government administrators focused on one
narrow segment of bottled beverages.”

Terlato forms new spirits division

Terlato Wines
International, Lake Bluff, Ill., has formed a new luxury spirits division
called Paterno Imports. The new division brings back the original name of
the company created by Anthony Terlato and will carry Xellent Swiss Vodka
as its first offering.

“A luxury spirits division is a natural
next step in the evolution of our growing company,” said William
Terlato, president and chief executive officer at the company. “We
have the marketing and sales expertise in place and Xellent Swiss Vodka is
the ideal brand to anchor the launch of this new division, with its
distinguished quality and breakthrough packaging.”

Xellent is made from Swiss winter rye, and will launch
nationwide in the United States this month.

Constellation sells brands to The Wine Group

Constellation Brands Inc.,
Fairport, N.Y., will sell the Almaden and Inglenook wine brands, and the
Paul Masson winery in Madera, Calif., to The Wine Group LLC for $134
million. The companies expect the transaction to close by the end of this
month.

Constellation plans to retain the Mission Bell Winery,
also in Madera, Calif., allowing the company to increase premium wine
production in California's San Joaquin Valley, it says. The winery also
will provide wine production services to The Wine Group on a contract
basis.

In other Constellation news, the company announced
last month that its Barton Brands division has acquired the remaining 50
percent equity stake in its Planet 10 Spirits joint venture. Planet
10’s leading product is Effen vodka from Holland.

Nebraska Wine & Spirits will operate as Republic
National Distributing Co.-Nebraska, and will be led by Paul Epstein, who
will serve as chief executive officer. Gary Epstein will be chief operating
officer, and Harold Epstein, who founded Nebraska Wine & Spirits in
1975, will be chairman of the board of the new division.

Also in Nebraska, the company signed a letter of intent
to acquire Republic Beverage Co., formerly known as United Distillers
Products Co. Republic Beverage’s Chairman David Friedland, President
Tom Friedland and the rest of the company’s management and sales
teams will remain in their roles.

Widmer Brothers dedicate facility expansion

Kurt and Rob Widmer,
founders of Widmer Brothers Brewing Co., Portland, Ore., dedicated their
newest brewery expansion to their father, Ray Widmer, who recently retired
from his duties at the facility.

The company expanded the brewery to include a
52,000-square-foot, three-level addition with new fermentation facilities,
relocated keg washing and filling, new cold keg and bottle storage, office
space, an additional shipping dock, and an expanded quality assurance lab.
The expansion was dedicated to Ray Widmer on Jan. 11, in a private
ceremony.

Kobrand splits wine, spirits

Kobrand Corp., Purchase,
N.Y., has divided its wine and spirits portfolios into two sales and
marketing companies – Kobrand Wines and Kobrand Spirits. The move is
intended to enhance the focus, attention and strengths of each category.

“Our industry is continually confronted with
seemingly endless consolidations and newly formed alliances at the supplier
level, and as a result many producer/brand owners in the U.S. market feel
that they have been relegated to a secondary position,” said Charles
Palombini, president and chief executive officer of Kobrand Corp.
“This ‘one-size-fits-all’ approach simply does not
appropriately serve the needs of so many brands, and often discourages new
brand initiatives.”

Tom Congdon will serve as vice president and director
of spirits for the new spirits division, which consists of the
Alizé, Delamain Grand Champagne Cognac, Depaz Blue Cane Amber Rhum,
Café Bohême and Larressingle Armagnac brands.

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